Investment Climate in

Investment Climate in Uttar Pradesh

Contents

Economic and Demographic Profile 1 Economic Profile 1 Demographic Profile 2 Physical Infrastructure 3 Power 3 Roads 3 Railways 3 Dedicated Freight Corridor 4 Mumbai Industrial Corridor 4 Airports 4 Telecom 4 PPP Projects 4 Social Infrastructure 6 Health 6 Education 6 Industrial Profile 7 Land Availability 8 Industrial Land 8 Agricultural Land 8 Manpower Availability 8 State Policies and Incentives 9 Investments in the State 9 Looking Ahead 10 Annexure : Policies 11

• All data is at constant (2004-05) prices unless explicitly stated otherwise • GSDP stands for Gross State Domestic Product • CSO data accessed on 18 October, 2012 EXECUTIVE SUMMARY

Uttar Pradesh is one of the largest states in . Accounting for 7.3 percent of the country’s area, it is home to 16.5 percent of Indians. The state contributes 8.1 percent to India’s GDP.

A series of recent policy initiatives and focus on infrastructure development, supported by availability of skilled manpower, good resource base and a large consumer market all makes Uttar Pradesh an attractive investment destination.

Advantage Uttar Pradesh:

• New policy initiatives creating favourable policy environment. These include the New Infrastructure & Industrial

Investment Policy 2012. In addition, new policies such as Biotech Policy, Food Processing Policy, Solar Policy and

Sugar Policy are expected to be announced shortly

• Robust industrial infrastructure including theme parks, export parks & SEZs

• 57 percent of eastern Dedicated Freight Corridor and 7 percent of Delhi-Mumbai Industrial Corridor will pass

through the state

• Focus on improving connectivity further through mega road projects, in PPP, such as ,

connecting with

• Abundant agro resource base. Leading producer of wheat, sugarcane and potato, ranks second in vegetable

production and third in fruit production, amongst all Indian states

• Longest network of rivers and canals measuring 31,200 km fostering the agriculture sector1

• Huge market potential owing to a large domestic consumer base

1 http://udyogbandhu.com 1

Photo : trackreviewers.com

Economic & Demographic Profile

Economic profile The GSDP of the state stood at Rs 4,200 billion during 2011- 12 registering a CAGR of 7 percent from Rs 2,608 billion during 2004- 05. The GSDP of the state accounts for 8.1 percent of the national GDP.

Figure 1 : Growth of GSDP of Uttar Pradesh Figure 2 : Key economic facts

5,000 10.0 Key Economic Indicator (2011- 12) Value 8.1 4,200 3,961 4,000 7.3 8.0 3,674 GSDP Rs 4,200 billion 6.5 3,447 3,222 7.8 6.0 3,002 3,000 2,778 7.0 6.6 6.0 Growth in GSDP 6.0 percent

In billion 2,000 4.0 Per Capita Income Rs 18,099 In percentIn

National Per Capita Income Rs 37,851 1,000 2.0

Source: CSO - 0.0 06 07 08 09 10 11 12 ------2005 2006 2007 2008 2009 2010 2011 Source: CSO 2

In terms of structure of the economy, the share of the services Demographic profile sector has increased in line with the national trends. Uttar Pradesh is the most populous state of India accounting Figure 3 : Contribution of different sectors towards the for 16.5 percent of the country’s total population.2 The decadal growth rate of population for the state is 20.1 percent as 2004-05 2004-05 2011-12 compared to the national growth of 17.6 percent. The density of population of the state is high at 828 persons per sq km.3

22.5 29.7 29.7 Figure 4 : Key Demographic Indicators (2011)

47.0 47.0 53.9 Key Indicators Value

23.6 Population 199.6 million 23.3 23.3 Population size (Males) 104.6 million Population size (Females) 95.0 million Agriculture IndustryAgricultureServicesIndustry AgricultureServices Industry Services Population size (Urban) 44.5 million

Source: CSO Population size (Rural) 155.1 million Density of population (persons 828 per sq km) Literacy Rate 69.7% Male Literacy Rate 79.2% Female Literacy Rate 59.3% Sex Ratio (females per 1000 males) 908

Source: Census 2011 (Provisional)

2 Census 2011 (Provisional) 3 Census 2011 (Provisional) Photo : uttarpradeshlive.com 3

Physical Infrastructure Roads

Power The national highway in the state is 7,818 km which accounts The state has an installed capacity of 13,683 MW. This includes for 10.2 percent of the total national highways in the country. All 5,222 MW under state utilities, 4,933 MW under central utilities district headquaters to be connected by four lane roads6.

and 3,528 MW under the private sector. Of the total installed Figure 6 : Key Road Network capacity in the state, the contributions from various sources are: 4 Road Type Road Length (in km) • Thermal power – 79.1 percent National Highways 7,818 • Hydro power – 13.3 percent • Renewable energy sources- 5.1 percent State Highways 7,922 • Nuclear power – 2.5 percent Major district roads 7,070

Figure 5 : Peak demand – supply position in the State Other district roads 31,238

14,000 22.8 22.1 25 Village roads 110,195 20.4 21.1 12,000 19.4 18.0 20 Source : Public Works Department,Government of Uttar Pradesh, www.nhai.org/ 10,000 statewise1.asp 8,000 15

MW 6,000 10 Railways 4,000 % Deficit Peak 3.7 2.3 5 2,000 The state has 8,763 km of railway network which is the largest 0 0 in the country. The Delhi Metro Rail links Noida and 05 06 07 08 09 10 11 12 ------with Delhi. There are further plans to increase the connectivity

2004 2005 2006 2007 2008 2009 2010 2011 in a phase-wise manner, for which the Ghaziabad Development Peak Demand Peak Met Peak Deficit % Authority has signed an MoU with the Delhi Metro Rail 7 Source: CEA Corporation .

During the last few years, large scale generation capacity has been added in the state - 4,080 MW during 11th Plan and another 16,000 MW is proposed by the end of the 12th Plan. So far, during the first year (2012-13) of 12th Plan 1,000 MW has been added.5

The state has also introduced Input Based Franchisee system in Agra to improve the power distribution mechanism. 4 CEA, August 2012; including allocated shares in joint and central sector utilities 5 Draft National Electricity Plan for 12th Plan, January 2012; CEA 6 Planning Department, Government of Uttar Pradesh 7 Year Book 2010-11 Photo : Jaypee Group 4

Dedicated Freight Corridor

Uttar Pradesh is the biggest beneficiary of eastern Dedicated Wireless and wireline service providers in the state include : Freight Corridor project with the share of 57 percent in the total length of 1,839 km8. Dadri is the junction point of eastern & • Bharti Airtel western Dedicated Freight Corridors. Dedicated Freight Corridor • Aircel Corporation of India has proposed to provide rail connectivity to a • Reliance Communication Logistic Park proposed at , which is to be built in PPP mode. • Vodafone While the eastern Freight Corridor will provide connectivity to the • Tata Teleservices eastern coalfields of India – which is very important for thermal • Bharat Sanchar Nigam Limited power projects, the western corridor will connect the state to the western and southern markets, and the ports as well. PPP Projects

Delhi-Mumbai Industrial Corridor Agra- Expressway

Delhi Mumbai Industrial Corridor is envisaged along the western This proposed 8-lane access controlled Green Field Expressway Dedicated Freight Corridor. About 150 kms on either side of the from Agra to Lucknow connects to Lucknow via western Dedicated Freight Corridor will be developed as DMIC Agra covering about 530 km presently taking time of around influence area, thus benefitting the industries in the state. DMIC 9 hours. While on construction of expressway from Agra to will start from Dadri in Uttar Pradesh which is also the junction Lucknow, linking Yamuna Expressway, the journey time will point of eastern & western Dedicated Freight Corridors. About 7 drastically reduce to 5 hours and likewise the 6 hours journey of percent of the DMIC region will be located in Uttar Pradesh and 365 km between Agra and Lucknow would reduce to around 3.30 will cover 12 districts located in the northern part of the state hours through this proposed Expressway. adjoining Delhi with a total area of 36,068 sq km. UP Expressways Industrial Development Authority (UPEIDA) has Figure 7: Proposed Industrial Projects under DMIC been nominated as nodal agency for development of expressway. The concept report of the project has been finalized. Bid for Proposed Location Purpose Phase selection of consultant for selection of developer has been issued. Investment Regions (IR): Dadri-Noida-Ghaziabad General Manufacturing Phase IA Northern Peripheral Road, Ghaziabad Industrial Areas (IA): This 4 lane, 20 km long road, start from Delhi Border (Wazirabad) -Muzaffarnagar Engineering/ Manufacturing Phase IB and ends at Hapur Road. The land requirement for ROW is Source: DMIC estimated at 200 ha. Ghaziabad Development Authority has been nominated as the nodal agency. Consultant has already been selected for preparation of TEFR, bid document for selection of Airports Developer, etc.

The state has 6 domestic airports, located at Agra, , Highways in the State , Kanpur, Lucknow and . International flights operate from Chaudhary Charan Singh International Airport, The state government through Uttar Pradesh State Highways Lucknow and Lal Bahadur Shastri Airport, Varanasi. During 2011- Authority, an authority set up for maintenance of highways, is 12, Varanasi airport received 747,811 passengers and Lucknow undertaking upgradation/maintenance of state highways in Uttar airport received 2 million passsengers9. Government of Uttar Pradesh under public-private-partnership mode on Design, Build, Pradesh has proposed a new airport at Shrawasti in Kushinagar Finance, Operate and Transfer (DBFOT) basis. district. Presently, as many as 26 state highways, in different part of the state have been undertaken by the authority. The authority is Telecom planning for early implementation of these state highways.

Uttar Pradesh has 130.8 million subscribers and an overall The developers for 4 state highways containing length of 484 teledensity of 60.9.10 km long, have been selected. The consultant for the remaining

Figure 8 : Key Telecom Indicators projects has already been selected for carrying out feasibility and Viability study for these projects taking VGF into considering. Key Indicators Value Subscriber base* 130.8 million Wireless subscribers 128.7 million 8 Wireline subscribers 2.1 million Dedicated Freight Corridor Corporation of India 9 Traffic News, March 2012, Airport Authority of India Source: The Indian Telecom Services Performance Indicators (January - March 2012) 10 Includes Uttar Pradesh (East & West) and Uttar Pradesh (West) includes ; The Telecom Regulatory Authority of India, Indian Telecom Services Performance Indicators (January - March 2012), Telecom Regulatory *Uttar Pradesh (East) - 76.4 million and Uttar Pradesh (West) - 54.4 million Authority of India Power Sector Figure 10 : Projects Implemented on PPP mode

S.NO. Name of the department No. of Estimated project Generation Projects cost (Rs in billion)

Proposed projects of power include Bara and Karchhana power 1 Yamuna Expressway Development 1 103.7 Authority generation projects at , Thermal Power Plants at Lalitpur Kanpur Dehat, Chitrakoot, Barabanki, and Hardoi 2 Urban Development-Solid Waste 8 2.2 Management & at various stages of implementation. Dopaha (3x660MW) in Sonebhadra district and Jawaharpur (2x660MW) 3 Information Technology and 1 1 Electronics (11759 CSC) in district are under active consideration. The consultant for Dopaha, and Jawaharpur Thermal Power Plants has been selected Total 10 106.9 and bidding process for selection developer is at its various stages. Source: Government of Uttar Pradesh

Transmission

UPPTCL has planned to construct the 765kv & 400kv sub-stations along with associated transmission lines to evacuate power from proposed Anpara-D (2x500MW), Bara (3x660MW), Karchhana (2x660MW) & Meja (3x660MW) thermal power house and to wheel them to diverse load centers concentrated mainly in central & western part of Uttar Pradesh. The transmission projects worth Rs 101.7 billion have been awarded under PPP mode on BOOT basis. Developer has been selected for package-I and package II and LOI has already been issued to the developers.

Taj International Airport

The Governmnet of Uttar Pradesh has planned to develop an airport of international level under Public Private Partnership mode on DBFOT basis with Department of Tourism as the nodal agency.

Figure 9 : Proposed investment through PPP projects

S.NO. Name of the department No. of Projects Estimated project cost (Rs in billion) 1 Yamuna Expressway Development Authority 1 103.7 2 U.P. Expressways Industrial Development Authority 9 873.6 3 Housing and Urban Planning 3 7.4 4 UP State Highways Authority 19 121 5 U.P. Power Corporation Ltd. 19 1,111 6 Energy-UP Jal Vidyut Nigam Ltd. 10 3.6 7 Non Conventional Energy 11 1.2 8 Tourism 7 9.2 9 Urban Development 31 13.2 10 Transport 2 46.6 11 Information Technology and Electronics (17909 CSC) 1 1.5 Total 113 2,292

Source: Government of Uttar Pradesh 6

Social Infrastructure Education

Health The state has 146,568 primary schools with 343,000 teachers and 52,155 upper primary schools with 139,000 teachers having Uttar Pradesh has a vast network of health facilities and has total enrolment of 37.1 million.13 In terms of secondary education undertaken commendable efforts to strengthen its health the state has 16,510 higher secondary schools with 213,000 infrastructure. A sum of Rs 50 billion was allocated for enhancing teachers.14 medical and health infrastructure in the Annual Budget of Financial Year 2011-12. The state has 30 universities and 3,166 degree colleges.15 Figure 11 : Key health infrastructure Some of the prestigious academic institutions in Uttar Pradesh Key Indicators Number include:

Hospital and Dispensaries 7,040 • IIM (Indian Institute of Management), Lucknow Community Health Centres 737 • IIT (Indian Institute of Technology), Kanpur • Muslim University, Aligarh Primary Health Centres 3,693 • NIT (National Institute of Technology), Allahabad Sub Centres 22,386 • IIIT (Indian Institute of Information Technology), Allahabad • Banaras Hindu University, Varanasi Source: Planning Department, Government of Uttar Pradesh In the Annual Budget 2011-12, a sum of Rs 191 billion was The total number of allopathic hospitals and dispensaries earmarked for basic education, Rs 68.5 billion for secondary increased to 4,771 in 2011 from 4,595 in 2007. A substantial education and Rs 21.5 billion for higher education, about 19.6 increase was witnessed, in number of beds, in allopathic hospitals percent higher than the allocation made in the Budget 2010-11. from 48,283 in 2007 to 71,668 in 2011.

Number of hospitals and dispensaries on per 100,000 of population is 0.43 in Uttar Pradesh and 1.1 in India as of January 2010. Number of beds in hospitals and dispensaries on per 100,000 of population is 28.2 in Uttar Pradesh and 48.5 in India as of January 2010.11

The state also has 2,370 Ayurvedic and Unani hospitals.12 Figure 12 : Key Health Indicators Key Indicator Value

Birth Rate* 28.3 Death Rate* 8.1

Infant Mortality Rate** 61

Source: Sample Registration System, December 2011 Note: * per 1000 population ** per 1000 live births

11 Government of Uttar Pradesh 12 Ministry of Health and Family Welfare, 13 Economic Survey of Uttar Pradesh, 2009-10 14 Economic Survey of Uttar Pradesh, 2009-10 15 Planning Department, Government of Uttar Pradesh 7

Industrial profile Uttar Pradesh State Industrial Development Corporation The potential of agro based industry in the state is large. The (UPSIDC) and the Department of Infrastructure & Industrial state is a leading agri producer in the country. It is the leading Development are the nodal agencies for development of producer in wheat, sugarcane and potato. It contributes about industrial infrastructure in the state. Udyog Bandhu is an 19.7 percent to the country’s total foodgrain production (2010- industrial development agency which facilitates investment, 11) and 34.5 percent to the country’s total sugarcane production. operation and establishment of industrial undertakings in the It accounts for about 40 percent of the potato production of the state. country.

The abundant resources, policy incentives, availability of The sugarcane is produced in 44 districts of the state and of these workforce, large consumer markets and infrastructure in the districts, 28 districts are the major sugarcane producing districts. state make it an attractive investment destination. Some of the There are 125 operational sugar mills running in the state. important sectors in the state include agro-based and food processing, light engineering goods, sports goods, textiles, Similarly, the state ranks second and third in vegetable and leather-based goods, IT & ITeS, tourism and biotechnology. fruit production, respectively. Major fruits grown in the state The industrial landscape of the state is dominated by MSMEs. include (leading state in India in terms of production), Some of the leading MSME clusters in the state include guava (ranked fourth in India), banana and litchi. The overall which is the largest brass & silver handicrafts productivity of fruits in the state is 12.1 tonnes/hectares against 17 manufacturing & export centre of India, ceramic cluster at Khurja, national average of 11.9 tonnes/hectares . leather goods cluster at Kanpur, sports goods cluster at Meerut, The state is the largest milk producer in India with a total carpet cluster at Bhadhoi, silk cluster at Varanasi; foundry, leather production of 19.5 million tonnes. It accounts for more than 18 footwear and mechanical engineering equipment clusters at percent of the total milk production in the country. It has the Agra; brass & gun metal statue and locks clusters at Aligarh, highest buffalo population and second highest cattle population glass products cluster at Firozabad and woodwork cluster at in India.18 The large livestock population provides raw material for . the leather industry in the state. A part of the Delhi-Gurgaon-Noida-Ghaziabad auto-clusters is situated in . Resultantly, a number Tourism is another important sector for the state. One of the of original equipment manufacturers and auto component major attractions is the Taj Mahal located in Agra and counted suppliers have setup their base at Noida and Ghaziabad. Noida among the Seven Wonders of the World. The other prominent has also emerged as a hub for electronic goods, toys, electrical tourist and historical destinations are Varanasi, Piprahwa, equipment and garments. Kaushambi, Shravasti, Kushi Nagar, Agra, Lucknow, Chitrakoot, , Allahabad, Vrindavan and Meerut. The state received 155.4 Cement is another important sector in the state, producing million domestic tourists (18.3 percent of all domestic tourists) about 7 million tonnes per annum. Uttar Pradesh ranks 9th in and 1.9 million foreign tourists (9.7 percent of all foreign tourists 16 the country in terms of cement production. Due to large scale visiting India) during the year 2011.19 In terms of foreign tourists availability of sugar, the state is the largest producer of sugar in arrival, the state was ranked at 4th place and in terms of domestic India. tourists ranked 1st among all the states. Majority of the IT/ITeS companies in Uttar Pradesh are located in Noida and Greater Noida, due to the proximity to Delhi and The key sectors in the state include manufacturing, auto and auto availability of talent pool. There are 5 operational SEZs in Noida components, consumer goods, sugar, IT/ITeS and hospitality. and Greater Noida, of which 3 are primarily, dedicated to IT/ITeS industries. 18 SEZs have been notified for IT/ITeS industries in the state.

16 Cement Manufacturers Association 17 Annual Plan 2011-12, Uttar Pradesh 18 Economic Survey of Uttar Pradesh, 2009- 10 19 Tourism Statistics, Ministry of Tourism, Government of India, 2011 8

Land Availability industry specific infrastructure, textile training centre, fashion design centre, and quality control laboratory. Industrial Land » Lucknow will have an IT Park (LIDA) with an estimated cost of Uttar Pradesh has developed many SEZs, industrial clusters, Rs 2.85 billion spread over 130,000 sqm area. Another 150 Information Technology Parks, and Agro Parks in order to promote acres of land has been allocated for IT City at Lucknow. IT Park investments and to boost industrialization in the state. and IT City is also proposed at Agra.

The state has robust industrial infrastructure, including 15 » Plastic City is likely to be developed over 300 acres in industrial areas, 12 specialized parks, 4 growth centers and Dibiyapur industrial area. Industrial Infrastructure Development Centres. The state has proposed 40 IT/ITeS parks (apart from IT SEZs), 2 biotech zones Agricultural Land and a knowledge park. Development of integrated agro/food processing zones has been proposed at Hapur. Integrated Uttar Pradesh has a geographic area of 29.4 million hectares which logistics hub (free-trade warehousing zones) has been proposed is about 9 percent of the land area of the country. The state is fed in collaboration between IL&FS, Mineral and Mining Trading by 5 major rivers namely the Ganga, the Yamuna, the Ramganga, Corporation and Mitsui (Japan). The Greater Noida Phase-II has 19 the Gomti and the Ghaghra making it the one of the most fertile percent land reserved for industrial use. land areas, fostering agriculture growth. Figure 13 : Land Utilisation Pattern in Uttar Pradesh • Special Economic Zones: 21 SEZs have been notified, formal approval to 34 SEZs and in principle approval to 1 SEZ has been granted by the Government of India. In all 56 SEZs proposals have been recommended by the state government. Eight SEZs are functional out of which six have been developed in the private sector.

Moradabad Special Economic Zone, a sector specific SEZ for handicrafts has been developed over 467 acres in Moradabad.

• Integrated Industrial Development Centres & Growth Centres: have been developed at (Kosi Kotwan) , Etah, Banthar (Unnao), Baghpat, Masuri Gulawati (Ghaziabad), Kursi Road (Barabanki) and Chandauli (Varanasi) in 4 areas of 50 acres Source : http://planningcommission.nic.in approximately each, under Central Government Scheme. In addition to these growth centres have been developed at Shahjhanpur, Jainpur (Kanpur Dehat), Jhansi, Dibiyapur Manpower Availability (Auraiya). The state has abundant unskilled, semi-skilled and skilled • An Integrated Industrial Township – Tronica City- has been workforce . The state will account for 23 percent of the incremental developed over 1,600 acres land in Ghaziabad. increase in total population of the country out of which the share of the working population in the age-group 15-59 years of the • Theme Parks: Sector specific parks are being developed in the state would be 21.9 percent as per population projections for state 2021.20

» 2 Export Promotion Industrial Parks have been developed by To prepare the young force for industry, a Skill Development UPSIDC on 200 acres at Gautam Budh Nagar and at Agra on Mission was launched in the state in 2009 to align the skilling 100 acres land, where high grade infrastructure facilities have initiatives with the industry manpower needs. been provided. Currently, the state has 1,250 ITIs/ITCs with a total seating capacity » Leather Technology Park has been developed at Banthar, of 1,46,474.

Unnao on 232 acres to house leather tanneries and leather Figure 14 : ITIs/ITCs (January 2012) goods units. Apart from this one more leather park has been proposed at Sandila Hardoi. Institutes Numbers Number of Government ITIs 314 » 2 Agro Parks (over 180 acres of land) have been developed at Lucknow & at Varanasi for agro and food processing industry Seating Capacity 32,364 with specialized Infrastructure facilities including multi Number of Private ITCs 936 chamber cold store with controlled atmosphere facility and Seating Capacity 1,14,110 washing-sorting-grading line. Total ITIs/ITCs 1,250 » UPSIDC has set up Apparel Parks at Tronica City, Ghaziabad Total Seating Capacity 1,46,474 and Textile & Hosiery Park at Rooma district, Kanpur with Source: Directorate General of Employment & Training (DGET), Ministry of Labour & Employment, Government of India

20 India Labour Report 2009, A Report by TeamLease and IIJT 9 9

State Policies and Incentives

In order to attract investment into the various sectors of the state and contribute to the development of the economy as a whole, the Government of Uttar Pradesh has undertaken several policy measures. These policies provide a roadmap and attempt to boost the industrial climate and remove various road blocks which hampered the industrial expansion of the state. These policy documents also encompass investment incentives and schemes for investors.

Please refer to Annexure, for various policies in place in Uttar Pradesh.

Single Table Clearance System

Nivesh Mitra has been envisaged as a simple, user friendly, entrepreneur centric web application that enables existing & prospective investors and entrepreneurs to get online clearances/NOC’s from concerned department with ease and minimal running around.

Udyog Bandhu acts as the nodal agency for implementation of ‘Nivesh Mitra’, a web based online facility for entrepreneurs desirous of setting up an enterprise in Uttar Pradesh.

Nivesh Mitra acts as a seamless interface, aimed to facilitate faster and time bound issuance of various approvals needed by entrepreneur desirous of setting up of an enterprise in Uttar Pradesh. It provides a hassle free and user friendly platform between existing & prospective investors and entrepreneurs and various departments to ensure faster and time bound issuance of various approvals.

Entrepreneurs setting up small, medium & large scale industry have to file application forms mandatorily through this system. Nivesh Mitra provides the facility of online submission and updating of all forms required for various approvals by the entrepreneurs.

Nivesh Mitra is functional in all districts of the state and is mandatory for small, medium and large scale enterprises, while it is optional for micro industries. The facility is available for applying for clearances from 12 departments viz. Directorate of Industries, Power, Pollution, Food, Drug, Electrical Safety, Fire Safety, Excise, Forest, Commercial Tax, Labour & Factories.

Investments in the State

The state received industrial investment proposals amounting to Rs 2,616.2 billion during the period August 1991 to May 2012. During the year 2011 the state has attracted investment intentions of Rs 436.7 billion.

Figure 15 : Investment Intentions in the state

Proposed Share of state in Proposed Numbers Northern Region Year Investment Employment Filed (Rs billion) proposed investments (Numbers) (percent) 2009 176 101.4 19.3 41,010

2010 168 137.9 18.7 45,416

2011 163 436.7 43.9 29,346

2012(May) 55 24.0 9.9 11,870

Source: SIA Statistics, Department of Industrial Policy and Promotion, Ministry of Commerce & Industry Note: Investment in terms of Industrial Entrepreneur Memoranda (IEMs) filed, Letters of Intent (LOIs) issued and Direct Industrial Licenses (DILs) issued Northern Region includes the states of Delhi, Haryana, Himachal Pradesh, Jammu & Kashmir, , Rajasthan, Uttar Pradesh, Uttarakhand and UT Chandigarh

Foreign Direct Investment

According to the Department of Industrial Policy & Promotion, the cumulative FDI inflows from April 2000 to July 2012 amounted to US$ 330 million (including Uttarakhand). However, it does not include FDI data reported in RBI office. For the period April 2012 to July 2012, FDI inflows amounted to US$ 13 million21.

21 Department of Industrial Policy and Promotion, Government of India 10

LOOKING AHEAD

With focus on infrastructure and industry, and electronics. The state also offers huge infrastructure projects, including export the investment activity in Uttar Pradesh potential in sectors like agriculture, food zones, theme parks and SEZs. has been gathering momentum over the processing, skilling, textiles, leather-based The state itself is an attractive market past few years. The state has attracted and mineral-based industries. accounting for 16.5 percent of the more than Rs 463 billion22 industrial Its young population, improving education country’s population. investment proposals in the past few years. infrastructure, initiatives like the Nivesh PPP model has also been adopted by the Mitra all add to the investment appeal of state in various sectors like road sector, the state. power sector and urban rejuvenation such as Yamuna Expressway. Uttar Pradesh The proposed eastern Dedicated Freight proposes to bring investment through PPP Corridor with about 57 percent of the mode worth Rs 2,182 billion in the 12th corridor passing through the state Five Year Plan.23 will facilitate Uttar Pradesh get easier access to seaports in West Bengal and The industrial policy of the state focuses also the eastern coal fields of India. on agro & food processing industries, The Delhi Mumbai Industrial Corridor biotech, tourism, energy and Information planned along the alignment of western Technology. In the services sector, IT, Dedicated Freight Corridor will provide tourism and banking are the important further impetus to trade and investment areas. The state has emerged as a hub in the state. In addition, the state has for IT/ITeS industries including software, implemented a number industrial captive business process outsourcing

22 http://udyogbandhu.com/DataFiles/CMS/file/energy_policy_2009.pdf 23 Planning Department, Government of Uttar Pradesh 11

Annexure : Policies

New Infrastructure & Industrial Investment Policy 201224

In view of major transformation of industrial environment globally and within the country, Government of Uttar Pradesh has approved and announced new Infrastructure and Industrial Investment Policy-2012 with an objective of attaining the target of 11.2 percent industrial growth in Uttar Pradesh.

Significantly, to make policy execution transparent and effective all supporting Government Orders, Notifications, amendments in Acts, rules and regulations have been made part of policy document.

Uttar Pradesh IT Policy 201225

In the fast paced technology sector such as Electronics and Information Technology, the characteristics which underpin the industry and services are fast technological developments, reducing business cycle times, just-in-time and time to market. Key features:

• Interest Subsidy : 5 percent per annum for a period of 5 years on the rate of interest on loan obtained from Bank/FIs would be

reimbursed subject to a maximum of Rs 10 million per annum per unit

• Stamp Duty : 100 percent exemption of stamp duty on purchase/lease of land/office space/ building

• VAT : IT units having capital investment of Rs 50 million or above would be allowed interest free loan equivalent to the amount of

VAT and Central Sales Tax deposited every year for a period of 10 years, or 10 percent of annual sales, whichever is lower

• Provision For Land : Land at rebate of 25 percent of prevailing rates at Tier II and Tier III cities; Additional FSI :100 percent in TIER II/

TIER III cities

• Industrial Promotion Subsidy : Subsidy equivalent to 50 percent of incentives admissible for new units would be admissible to

existing units if additional capital investment is made for capacity enhancement to an extent of 50 percent or more in a period of

three years in Tier II/Tier III cities

• Plant and Machinery for Captive Power Generation : Captive Power Generation Plants having minimum capacity of 3 MW,

and distributing the power only within IT/ITeS/Mega Investment Unit zones will be deemed as IT/ITeS units and they would get the

incentives available for IT/ITeS units

• Incentives on case to case basis : Projects proposed above Rs 2 billion shall be considered for special incentives decided by

the Empowered Committee

• Employment Generation : 50 percent incentive on expenditure on account of contribution towards Employee Provident Fund and

Employee State Insurance schemes units employing at least 100 employees and retaining at least 75 percent locals for a period of

5 years, subject to a maximum of 25 percent of Fixed Capital Investment

• Single Window Clearance : A government body under the Chairmanship of Principal Secretary, IT & Electronics, for clearances

like Pollution, Power Allocation etc

• Uninterrupted Power Supply : IT units setup in IT Cities / IT Parks on Independent Feeder shall be provided uninterrupted power

supply from state utility. The cost of provision of separate feeder from the transmission sub station will be borne by the Unit/IT City/

IT Park

• IT Corpus : Each department shall earmark a minimum of 2 percent or as per directions of Government of Uttar Pradesh from time

to time of its plan budget for IT applications

24 http://udyogbandu.com 25 Government of Uttar Pradesh 12

Energy Policy 200926 Uttar Pradesh Energy Policy 2009 is structured with consumers as the focal point & aims at fulfillment of the overall need for universal access and for providing reliable, quality & affordable power. Key features:

• Access to electricity to all households in next 5 years

• Power demand to be fully met by 2014. Energy and peaking shortages to be overcome and adequate spinning reserve to be

available

• Supply of reliable and quality power of specified standards in an efficient manner and at reasonable rates

• Per capita availability of electricity to be increased to over 1,000 units by 2017

• Financial turnaround and commercial viability of electricity sector thereby reducing the financing burden on the state over a period

of time while recognizing the fact that during the initial transition period, state support would be a key determinant for the success

of entire exercise

• To increase the availability of power by

A. encouraging augmentation of environment friendly generating capacity

B. sourcing competitive and reliable bulk power from sources both within and outside the state

C. encouraging developers to enter into MoU for generation and supply of power to the state in cases where the developer has

tied up or has taken steps to tie up coal, water and has arranged land on his own or with the help of the state government.

• Optimization of generation of existing plants by putting up additional units, through renovation and modernization or by

changing configuration of machines in case of plants under commissioning or by allowing alternative fuel for seasonal generating

units particularly those based on bagasse or bio mass

• To augment the transmission and distribution capacity and refurbish the existing capacity with a view to improving efficiencies,

reliability & quality of supply and reducing losses

• To facilitate consumers benefiting from competition & towards this end encourage private sector participation in all areas viz.

generation, transmission, distribution, trading and R&M

• To support the Uttar Pradesh Electricity Regulatory Commission with all policy and other administrative measures with a view to ushering in a rationalized tariff framework with efficient distribution of subsidies

26 http://udyogbandhu.com/DataFiles/CMS/file/energy_policy_2009.pdf This report has been made by KPMG in India for CII.

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